The Bank of England lowered its interest rate for the first time in seven years

The Bank of England today lowered its key interest rate by 25 b.p. to 0.25%, thereby updating the historical minimum for all 322 years of its existence. This reads a message on the website of the regulator. Before that, the last time the decision to change the rate the Bank was adopted in March 2009, at the peak of the global economic crisis — then it was lowered from 1% to 0.5% per annum.

Such a decision was widely expected by market players. so, 90% surveyed by Bloomberg economists expected to lower rates by 25 b.p. and few were talking about the preservation of the same, or about the even larger cuts in rates. From the message of the regulator it follows that the decision to lower rates was adopted by the Council of the Bank unanimously.

Pending the decision of the Bank of England this morning, the pound briefly fell against the dollar by 0.2%, but then recovered and by the time of publication the controller of your ad is kept in the neighborhood of $1,333. As the Financial Times, while the pound shows the worst performance among major global currencies in 2016. Over the past seven months of the year it fell by 9.1%.

However, after the BOC rate decision, the pound once fell to $1,317 (or 1.5% compared to the previous day’s close), which is a minimum of the whole week.

In addition to the rate decision, the English regulator has expanded the program of “quantitative easing” bond redemption for “injection” of money into the economy. A program of buying corporate bonds widened by £10 billion, redemption of government bonds — at £60 billion Overall ceiling of the programme thus expanded to £435 billion.

An obvious reason for the rate cut is the recent vote of the British people in a referendum on leaving the EU. Earlier, the head of the Bank of England mark Carney has said repeatedly that the decision to withdraw from the EU would negatively affect the British economy. On the eve of the Agency Markit reported that the index of business activity in the UK has undergone in July, a record collapse: up to 47.4 points from June’s 52.3.

“It is likely that recent studies exaggerate the extent of the damage the British economy from Brexit, told the FT analyst JPMorgan’s David Stubbs. — Therefore, a cautious reduction in rates by 25 b.p. and endless speeches about vigilant monitoring of economic risks is presented the perfect defensive strategy for the regulator”.